The Securities and Exchange Board of India (Sebi) has banned Vijay Mallya from accessing the securities market for three years. This means Mallya cannot buy, sell, or deal in securities, either directly or indirectly, or be involved with any company listed or planning to be listed on the stock market.
Restrictions and Freezing of Assets
During this ban, Mallya’s current holdings, including mutual funds, will be frozen. This decision is part of an investigation into funds being routed to the Indian securities market through overseas bank accounts with UBS AG.
Investigation Findings
Sebi launched an investigation after receiving information from the Financial Services Authority. The investigation revealed that Mallya used a foreign institutional investor (FII) sub-account called Matterhorn Ventures to indirectly trade in shares of his own companies, Herbertsons and USL, in India.
Mallya reportedly routed money through various beneficiary accounts with UBS, hiding his identity in the process. This deceptive financial route violated the FII Regulations.
Manipulative Practices
Sebi concluded that Mallya engaged in manipulative and fraudulent activities, abusing the FII framework and using deceptive practices in trading securities of his group companies. The order states that Mallya’s actions were in violation of securities laws and involved unfair trade practices.
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